Gradientech: Year-end report 2023

Gradientech AB (publ) year-end report for 2023 is now available on the company's website www.gradientech.se.

Fourth quarter 2023

• Net sales amounted to SEK 376 thousand (831).
• Net profit/loss amounted to SEK -17,810 thousand (-16,409).
• Earnings per share before and after dilution were SEK -1.00 (-1.03).
• Cash flow from operating activities amounted to SEK -14,637 thousand (-19,550).
• Cash and cash equivalents amounted to SEK 10,811 thousand (21,177) as of December 31, 2023.
• Equity amounted to SEK 48,451 thousand (46,578) as of December 31, 2023.
• In October, Gradientech announced two new exclusive distribution agreements for the commercialisation of QuickMIC®; with AB Scientific in United Kingdom and Ireland as well as with Iberlab in Portugal.
• Within the framework of the AGM’s authorization, the Board of Directors decided on 13 November 2023 to carry out a rights issue of 4,448,812 shares. The subscription period ended on December 6, 2023 and was oversubscribed amounting to a total of approximately 107 percent. Through the issue, Gradientech received the maximum planned amount of approximately SEK 25.8 million before deduction of issue costs.

January–December 2023 period

• Net sales amounted to SEK 1,950 thousand (988) KSEK.
• Net profit/loss amounted to SEK -63,678 thousand (-60,962).
• Earnings per share before and after dilution were SEK -3.64 (-3.90).
• Cash flow from operating activities amounted to SEK -60,538 thousand (-67,144).
• On January 18, 2023, the subscription period for the rights issue ended, which started on December 27, 2022. The final outcome comprised a total of 1,271,057 subscribed shares, which provided Gradientech with approximately SEK 26.1 million before transaction costs.
• Within the framework of the AGM’s authorization, the Board of Directors decided on 4 April 2023 to carry out a directed issue to the commercial partner a.d.a SRL of 550,000 shares at a price of SEK 20.50 per share. As a result of the issue, the share capital increased by SEK 55,000 to a total of SEK 1,779,525.00 and the number of shares increased to a total of 17,795,250 shares. The issue was registered with the Swedish Companies Registration Office on April 25, 2023.
• In April, Gradientech exhibited at ECCMID in Copenhagen, the world’s largest international meeting pf clinical microbiologists and infectious diseases specialists. In June Gradientech exhibited at ASM Microbe in Houston, Texas. At the congress, Gradientech presented data confirming that QuickMIC® outputs precise susceptibility testing results in 2-4 hours.
• At the AGM on May 9, Dr Hilja Ibert and Dr Nedal Safwat were elected as new members of Gradientech's Board of Directors. Ted Elvhage and Simon Turner did not stand for re-election.
• In July, the QuickMIC® system received Breakthrough device designation from the US Food and Drug Administration, FDA.
• In July an issue of convertible instruments, with deviation from the pre-emption rights for existing shareholder, was completed. A total of 815,823 convertible instruments were subscribed for and through the issue the company received approximately SEK 16.7 million before deduction for issue costs.
• Gradientech announces that it has started pre-clinical studies at two sites in the US.
• In July, Gradientech exhibited at the FEMS Congress of European Microbiologists in Hamburg, Germany.
• In August, a patent application was submitted regarding early prediction of resistance mechanism using machine learning.
• In September, Gradientech together with the Swedish distributor Triolab exhibited at the NSCMID congress arranged by the Nordic Society of Clinical Microbiology and Infectious Diseases.

Significant events after the end of the period

• In January 2024 Gradientech successfully completeed its pre-clinical testing of the QuickMIC® system in the US. The pre-clinical testing of the QuickMIC system has included about a hundred clinical patient samples and was performed at two reputable US clinical laboratories.
• The rights issue, whose subscription period ended on December 6, 2023, was registered together with the shares from the conversion of the convertible instruments issued in July 2023, with the Swedish Companies Registration Office on three occasions; 3 January 2023, 12 February 2024 and 15 February 2024. As a result of the two issues, the number of shares increased by 6,165,503 to a total of 23,960,753 shares and the share capital increased by SEK 616,550.30 to a total of SEK 2,396,075.30.
• Gradientech announced in the beginning of February that six QuickMIC® abstracts will be presented at the 34th European Congress of Clinical Microbiology & Infectious Diseases (ECCMID) in Barcelona, Spain 27-30 April 2024.

CEO statement

When I sum up 2023, we have during the year built a stable foundation needed for commercial success. We have tied up with leading distributors in important markets in Europe and have built up a good machinery regarding installations and training of end users. Together with our distributors, we have carried out studies with key opinion leaders around Europe who are trusted by the wider clinical microbiology market. This now also shows off in the record number of accepted abstracts about our QuickMIC® system and its performance at the year's most important conference, ECCMID, which takes place in Barcelona this spring. One can of course feel some frustration in the fact that the market for routine diagnostics has an inherent inertia in implementing new innovations and new workflows, but a very important part of achieving commercial success is in published studies by key opinion leaders that show what our system can deliver in routine laboratories. 2023 has also successfully dealt with robustifying the QuickMIC® system so that today it is truly adapted for routine diagnostics. We have reached targets with production scale-up projects according to plan, both in our final assembly line and in processes at our contract manufacturers. In development, the final work is underway to adapt the QuickMIC® system to the US FDA's requirements with, for example, an adapted antibiotic panel for the US market.

In 2024, we have two primary focus areas at Gradientech, to grow commercially in the European market and to conduct clinical studies in the USA. We are working towards the goal of starting the FDA study of QuickMIC® in the US in mid-2024. We have recently completed what we call pre-clinical studies in two US hospitals with satisfied users and good results, something that has provided marketing value in the US and practical lessons that we should benefit from in the upcoming FDA study. Three reputable US hospitals have agreed to participate in the clinical study and we are currently agreeing on budgets and contracts. Last month's discussions with the FDA have provided answers to the questions that have been decisive for us in determining the scope and content of the upcoming clinical study. With our Breakthrough Device classification of QuickMIC®, we have the advantage that FDA is now reviewing our set-up study plans and come up with possible adjustment proposals before the start of the clinical study. Today, there is only one FDA-approved system on the US market for rapid AST testing of samples from sepsis patients, directly from blood culture – with QuickMIC®, by comparison, appearing to deliver results in just under half the testing time.

In December, Gradientech carried out a rights issue to our existing owners. I would like to thank you for the great turnout, which meant an oversubscription of the issue and a total of SEK 25.8 million in added capital before minor issue costs. In addition to the capital, this also provided the important message in our ongoing discussions with investors for long-term financing that our existing owners believe in what we are doing and what we will succeed in going forward.

Sara Thorslund, CEO Gradientech

Uppsala, February 22, 2024

For further information, please contact:
Sara Thorslund, CEO
Tel: +46 763 29 35 80
sara.thorslund@gradientech.se

Urban Adolfsson, CFO
Tel: +46 708 20 72 09
urban.adolfsson@gradientech.se

Ann Charlotte Svensson, IR
ir@gradientech.se

About Gradientech
Gradientech is leading the field of ultra-rapid antibiotic susceptibility testing. We develop next-generation diagnostics in infectious disease medicine. Our product QuickMIC®, classified as a breakthrough device by the U.S. Food and Drug Administration, allows patients with sepsis to quickly receive specific guidance on the right antibiotic in the right dose. It saves lives, reduces healthcare costs and limits the spread of antibiotic resistance – one of the greatest global health threats of our time. Gradientech is headquartered in Uppsala, Sweden. Visit www.gradientech.se for more information.